Liam Denning is a Bloomberg Gadfly columnist covering energy, mining and commodities. He previously was the editor of the Wall Street Journal's "Heard on the Street" column. Before that, he wrote for the Financial Times' Lex column. He has also worked as an investment banker and consultant.

Tesla Motors is shifting gears in a big way. On Thursday evening, the electric-vehicle wunderkind will unveil the Model 3. Apart from the usual anticipation about the features Tesla might pack into its new car, it is expected to have one killer app: A $35,000 sticker price.

If electric vehicles are to ever run gas-guzzlers off the road, they need to be cheaper. So the Model 3 will represent Tesla's first real move into the mass market. When the first one rolls off the production line, perhaps next year, it will represent a milestone in an already extraordinary track record of success.

It may also underscore how overpriced Tesla's stock is.

Expected Tesla Model 3 Sticker Price

$35,000

Tesla carries a valuation combining the scale of global car manufacturer with the multiples of a tech startup. At a fundamental level, the vast majority of the stock's value pertains to billions of dollars of cash flow projected to materialize a decade or more from now (Tesla burns cash by the wheelbarrow-full right now). Wall Street's analysts justify stratospheric price targets with bullish assumptions about growth and eventual profits and, in at least one case, Tesla's roaring success in a business it doesn't even have right now.

To justify such hopes, the Model 3 must both persuade the driving masses to forsake their pumps for plugs and choose Tesla when doing so.

The big problem, though, is that the company's very success has pushed the world's major car-makers to launch or develop their own Model 3 challengers, threatening those cherished valuation assumptions. Tesla will be no pushover. But when hopes are this high, and horizons this far off, it doesn't take much to put the brakes on.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.